ESG Ratings, Investor Sentiment, and Stock Price Volatility
Abstract
ESG represents three major factors: environment, social responsibility, and corporate governance. This paper hopes to investigate the effectiveness of ESG ratings as investment guidelines in the A-share market, and the role of investor sentiment in the middle. It is shown that ESG rating information has a negative relationship with stock price volatility, and investor sentiment plays a negative moderating role on ESG rating. Based on the findings, this paper proposes policy recommendations from the perspectives of individual investors, rating systems, and firms, respectively.
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DOI: http://dx.doi.org/10.18686/fm.v8i3.9010
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